Beaumont Tashjian Law Blog

Tuesday, July 7, 2020

Solar Energy Systems: What Can an Association Do to Best Protect the Community?

In recent years, the laws governing homeowners’ installation of Solar Energy Systems, or “SES” have been updated in order to address evolving technology and the increasing popularity of solar panels. Under California Civil Code Section 714(a), owners’ associations are barred from adopting any regulations, restrictions or covenants that effectively prohibit the installation or use of a SES. Any such restrictions are deemed “void and unenforceable” as a matter of law.

However, this does not mean that associations are unable to regulate the installation of SES in their community. Civil Code Section 714(b) allows associations to impose “reasonable” restrictions on the installation of SES. “Reasonable” restrictions are those defined as “restrictions that do not significantly increase the cost of the system or significantly decrease its efficiency or specified performance, or that allow for an alternative system of comparable cost, efficiency, and energy conservation benefits.”

With SES installations come a variety of concerns. These concerns can include risk of property damage, as well as roof access, workmanship, conformity with legal requirements, protecting existing building improvements, protecting existing roof warranties and effecting repairs – especially with respect to an association’s ability to repair common area roofs and building components that may be covered by SES installations.

In balancing these concerns against the parameters of Section 714, et al., what can a board of directors do to protect their association while still complying with the law? The best practice is to adopt a set of rules or a policy that governs SES.  Without specific rules and regulations for SES, most boards are limited to enforcing existing architectural restrictions contained in their CC&Rs and similar governing documents, which typically are not detailed enough to properly address the specific risks and concerns associated with SES installations.  The following is a list of issues that can generally be regulated through a SES policy, in order to provide appropriate protections to the association, without running afoul of Civil Code Section 714:

  • Requiring architectural committee or board approval before a SES is installed on the roof of a common area, such as roof or carport

  • Conditioning the installation of SES subject to useable solar roof area and/or limiting installation to the portion of the roof covering the owner’s unit

  • Requiring a detailed application, including manufacturer’s specifications, solar site survey, engineering drawings, dimensioned plans and warranties

  • All SES must meet applicable health and safety standards and requirements imposed by state and local permitting authorities

  • SES shall not materially harm or damage common areas, or any other individual unit or exclusive use common area, void any warranties held by the association and/or impair the integrity of a building or structure

  • Requiring the owner or the owner’s chosen contractor to obtain certain insurance with minimum coverage amounts

  • Requiring that the owner be responsible for any property damage caused by the installation, maintenance, repair and removal of the SES

  • Requiring the owner to indemnify the association against third party claims related to the SES

  • Requiring the owner to promptly remove and reinstall the SES at the owner’s cost and expense in the event a common area repair or maintenance needs to be performed

These examples are some of many restrictions that may be imposed through the use of a policy, to govern the installation of SES, which will help to protect the association from exposure to unnecessary legal liability.  The policy should work hand in hand (i.e. not conflict) with existing restrictions in the association’s CC&Rs or other governing documents, to allow for proper and smooth enforcement.  

In order to bind the future owners/transferees of a unit or lot installing an SES, the Board may also require, through a SES policy, that the owner enters into an agreement and covenant with the association governing the installation, use, repair and removal of the SES.  The agreement and covenant is then recorded in the County Recorder’s office and will serve to bind future owners of the SES by requiring them to abide by the same terms and conditions as the original installing owners.  

Although in most circumstances when an association grants an owner exclusive use of common area space, the vote and approval of the membership is required, such is not the case with SES installations.  The law carves out an exception to the membership approval requirement in Civil Code Section 4600(b)(3)(J), which obviates the need to put the matter out to the vote of the owners.  More recent changes to Civil Code Section 714.1 also prohibit any provisions in an association’s governing documents that would separately condition approval for an owner’s SES on obtaining a vote of the association’s membership.

To adopt a SES policy, the board should consult with legal counsel to prepare a policy that addresses the association’s needs and remains consistent with applicable law.  A policy is the equivalent of an operating rule and, therefore, boards should follow the requirements of Civil Code Section 4360 in order to properly adopt the SES policy. The approval of the owners is not required. 

In the absence of SES rules or policies, community facilities and aesthetics may be significantly impacted, and common areas jeopardized. Boards will also experience difficulties with enforcement of uniform regulations.  A clear and concise SES policy can help alleviate such difficulties for associations and also function to streamline the process for owners, boards and community managers alike.


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